How to Boost your Credit Rating Without a Source of Income

Apr 03

According to recent statistics, the average UK household currently carries more than £3,200 of debt, spread across credit cards, overdrafts and various loans. This figure has soared during the recent economic tumult, as the British economy continues to hover on the very precipice of recession.

With consumer debt such a widespread issue, citizens are struggling to maintain a viable credit score. This problem has been exacerbated by an unstable job market, as those without employment have found it increasingly difficult to improve their financial status and credit rating.

Boosting your Credit Rating Without Income: Three Steps to a Brighter Financial Future

With this in mind, what practical steps can unemployed individuals take to improve their credit rating? Consider the following: –

Obtain an Up to Date Copy of your Credit Report: Your credit report is a fluid document, and one that is constantly updated throughout each year. Given the subjective nature of the entries that are made on your report, however, it is possible the erroneous debts could be recorded or that the information included may be outdated. With this in mind, you should look to obtain a free copy of your report and ensure that it is up to date and offers a true reflection of your credit rating.

Maintain Lines of Communication with Lenders: Once you have incurred a debt, it is recorded as a permanent record. This means that avoiding your lenders is an exercise in futility, as it will only encourage them to add missed payment charges and extortionate rates of interest to your account. By opening and maintaining the lines of communication with your creditors, you can explain your circumstances and negotiate a more manageable set of repayment terms.

Engage in Positive Credit Transaction: Another way of improving your credit score is to engage in positive credit transactions. While this is not necessarily straightforward for those who have already defaulted on several finance agreements, it is important to use valid credit cards responsibly when you have the opportunity. So if you do have cards with a nil or positive balance, look to make small and select purchases that can easily be repaid on a monthly basis.

The Bottom Line

In order to achieve a prosperous financial future, it is important to build a positive credit rating. You should also look to embrace a more frugal and sustainable lifestyle, by cutting the annual costs of financial products such as food, drink, entertainment and insurance. For assistance with the latter, consider visiting today.